An Internal Combustion Engine (ICE) is made up of hundreds of different components, which also increase maintenance costs and the risk of failure and breakdown. In these engines the fuel is mixed with air and ignited with a spark, to activate the pistons and start the engine, generating a force which moves the wheels and the vehicle.

An ICE is made up of pistons, piston rings, crankshaft, rods and rocker arms, carburetor, air filter, ignition system, exhaust pipe, catalytic converter and various gaskets.

Furthermore, many other systems guarantee the functionality of an ICE:

- the fuel supply system, with tank, fuel pump and petrol filter;

- the oil circulation system to lubricate the engine, with pump, radiator and various ducts;

- the cooling system, with pumps, radiator and various ducts;

- the transmission system, with clutch and gearbox.

It took more than 100 years to arrive at that technological marvel that we have today.
An Electric Engine, on the other hand, is made up of few components, with a less complex structure compared to that of a traditional ICE. The system is composed of a stator and a rotor, which are powered by the electric current supplied by the battery, generating an electromagnetic field that produces a force which drives the wheels through the transmission.

Furthermore, electric engines can also guarantee a much higher level of efficiency from a thermodynamic point of view. In fact, the efficiency, from source to wheel, of an electric car is around 70% compared to 30% of a petrol car.

Driving a Battery Electric Vehicle (BEV) is completely different than driving an ICE car. First of all, these vehicles are extremely quiet, as the electric powertrains emit almost no noise; furthermore there is neither a clutch nor a gearbox as they are not needed in a BEV. The car is therefore easy to drive, just push the accelerator and brake, paying attention because the response provided by the electric motor is instantaneous and the car takes off with ease.

In conclusion, a BEV is much simpler to build and assemble than a car with an ICE. Consequently, the Added Value, which determines the production cost of a car, is much lower.

But then, why BEVs available on the market are so much more expensive than traditional vehicles with ICEs?
The answer is complex and several factors must be taken into account.

First of all, the platforms adopted by car manufacturers for vehicle assembly require heavy investments which are amortized based on the quantities of vehicles produced. Ergo, the more vehicles produced, the less they cost. It is called economy of scale and is governed by the concept of Marginal Cost.

Second, in a car with ICE, most of the engine components are produced internally by the car manufacturer itself, and this determines a high Added Value. By contrast, in a BEV, the engine is mostly made by external companies. This causes, for the car manufacturers, the Added Value of the vehicle as a whole to collapse. This is the main reason why car manufacturers have, until now, concentrated the production on high-end and luxury vehicles, in order to compensate for the low Added Value of BEVs with a higher Added Value of additional quality components. Furthermore, this is also the reason why car manufacturers prefer to build Hybrid Vehicles with dual engines and therefore with more Added Value.

Finally, batteries, which are particularly expensive and easily account for 25% of the value of a BEV, are not made by traditional car manufacturers, but by external companies, 56% of which are Chinese, 26% Japanese, 10% Korean and the remaining 8% from other Westerners manufacturers.
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But things are starting to change. In China, the giant BYD (Build Your Dream) has set the price of the basic version of its Seagull small car, with a 30 kW battery and 305 km autonomy, at 8,900 euros. However, the Seagull, expected in Italy in June 2024, will cost us around 20,000 euros.

The European Federation for Transport & Environment (T&E) states that European car manufacturers are focusing above all on SUVs while the offer of smaller and cheaper models languishes: this industrial strategy slows down the mass diffusion of BEVs and leaves more and more space for Chinese competition from low cost cars (see:www.transportenvironment.org/discover/carmakers-are-failing-to-deliver-affordable-electric-cars-holding-back-ev-adoption-analysis).

The result, as emerges from T&E's findings, is that the average price of an electric car in Europe has increased by 39% since 2015, while in China it has decreased by 53%, precisely due to the "disproportionate" attention of European manufacturers on premium, larger and more expensive models. This is playing into the hands of Asian brands, which are rapidly expanding their offer of low-cost BEVs models, precisely in those market segments poorly covered by European manufacturers.

Finally, according to the Gartner consultancy firm, we will have to wait until 2027 to be able to purchase a BEV at a lower cost than a similar traditional model with an ICE. And these models will mostly come from the Far East. A further trade war awaits us?